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Checkpoint Systems Deems OAT Acquisition Strategic

President Per Levin says the recently completed purchase of a leading RFID software company enables Checkpoint to help retailers "scale up their RFID operations."
By Mark Roberti
"Most industrial manufacturers sell goods in a retail environment, so it's not like there is a bad fit," says Michael George, president and CEO of OATSystems. "We've done work with pharmaceutical manufacturers, but we've also done things with Target and others on the pharmacy site. Our software is a platform for manufacturers and retailers to collaborate to drive business benefits."

Levin and George both claim that Checkpoint, which reported $834 million in sales in 2007, brings financial stability and strength to the much smaller OATSystems. Checkpoint also offers OAT an opportunity to expand globally more quickly.

"Our companies tell us, 'We love your technology, but you are a small company. We would like you to be a strategic partner that has the global capacity to help us scale our RFID initiatives,'" George says. "That's always the challenge of small companies. It's great to be fast-moving and innovative, but you need to also serve your customers' needs globally. This allows us to stay fast-moving and innovative, but eliminates one of our customers' concerns."

OATSystems, George says, will continue to rely on IBM and other partners to install its software in the United States, and will also continue to work directly with some of its larger customers, including Best Buy, Target, CVS, Kimberly-Clark and Procter & Gamble. But in Europe, it doesn't have the same partner ecosystem established. Since Checkpoint has a strong presence throughout that continent, OAT can now take advantage of its new parent company's resources to expand throughout the region.

Over the next few months, the companies plan to integrate their financial systems and operations, and to develop a plan to drive retail sales of RFID systems faster than either could have accomplished individually. Checkpoint also intends to explore how radio frequency identification can be employed to enhance its shrink-control business, and to add supply chain visibility for its customers.

"UHF brings the ability to do a better job in shrink management," Levin says. "Every retailer will want to test, pilot and validate and build their own business case for RFID. It's going to take a while to go from something small to something big. Migration is key. We want to make sure that we are several steps ahead of our customers, so we can lead, rather than follow. That's why we secured OAT, because we think they are the leaders in RFID applications and item-level tracking."

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